Wind shears which cause a drop in IAS on descent are sometimes called undershoot wind shears since their effect
on a landing approach is to cause the aircraft to lose lift and descend below the intended approach path.

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I always get confused with this question too Stuart. I sort of understand the graphic, but would appreciate any advice on how I can understand this better.

One of the most important factors that contribute to the generation of lift is IAS. That is the combined effect of both the true airspeed and the ambient air density as it encounters the wing from the direction of flight. If you are parked stationary on the ground in a headwind, the IAS would be due only to the headwind and nothing else. If you are flying into a headwind the IAS is due to your forward motion PLUS the headwind which would have been present even if you were not moving.

If you were riding a push-bike into a strong headwind and the headwind SUDDENLY stopped, you would feel less wind in your face. A SUDDEN decrease in headwind causes a temporary drop in IAS because the inertia of the aircraft prevents it from suddenly increasing it's speed to compensate for the reduced headwind. Because IAS is an important contributor to the production of lift, a SUDDEN reduction in headwind will be accompanied by a sudden reduction in lift even though you have made no change in power or nose attitude.

This effect is called wind shear and it results in a loss of lift and an increased rate of descent. As the aircraft's inertia is slowly overcome, the IAS will gradually increase to it's original value even if the pilot makes no changes to power or nose attitude.